UNITED STATES v. IBM

UNITED STATES OF AMERICA, Plaintiff, against INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.

The opinion of the court was delivered by: EDELSTEIN

MEMORANDUM AND ORDER

This memorandum and order is occasioned by defendant's admitted delinquency in producing the written narrative statements of its four economic expert witnesses.

On February 1, 1980 the parties entered into a stipulation that direct testimony of remaining economic expert witnesses shall be submitted in the form of written narrative statements or by written answers to written hypotheticals or by a combination of the two under the terms and conditions of the stipulation. When that stipulation was discussed during the conference of February 5, 1980, counsel for defendant informed the court that defendant would require "at least several weeks" time out to prepare the written portion of their economists' testimony, tr. 99,106. Speaking to that projected delay, the court questioned whether "it would be prudent to consider dispensing with the narrative statements." Tr. 99,107. But the court was reassured by IBM counsel that use of narrative statements in lieu of live direct testimony, even with time out from the trial to prepare such statements, would result in a substantial saving of court time, tr. 99,107, 99,125.

During the conference of February 7, 1980, counsel for plaintiff asked IBM counsel for an estimate of the target date for submission of the narrative statement of IBM's first economic expert witness. Counsel for defendant replied that "the best target date I can give your Honor is the first week of April." Tr. 99,328-29. This initial target date was not met, presumably, because the parties and court were engaged in the herculean task of processing approximately 4000 documents offered by IBM and characterized by IBM counsel as documents which "must be in the record, or at least offered, prior to the time that the economists testify, so that they can utilize and rely on that evidence for their testimony." Tr. 99,094. In response to plaintiff's letter of April 28, 1980 to the court complaining of the delay in production of narrative statements, counsel for IBM conceded "that preparation of the economists' narratives has taken longer than expected," but restated his hope that "the narratives will be ready at about the same time the processing (of documents offered by IBM) is completed." Letter of Thomas D. Barr, dated May 1, 1980 to Robert J. Staal.

By June 2nd the court had ruled on more than 4000 documents submitted by IBM. During the period of time the parties and court addressed themselves to these documents, IBM's presentation of testimony came to a halt. (From February 28, 1980 through June 2, 1980 only one day was spent in court hearing trial testimony.) When the court scheduled a conference for June 2, 1980 it was anxious to determine, once and for all, when the narrative statements of IBM's four economic expert witnesses would be submitted. At that conference, counsel for IBM apologized for the delay in producing the narratives, and estimated that the first narrative would be handed over to the government shortly after July 4, 1980, tr. 112,722, 112,743. The narrative of IBM's second economic expert witness was to be produced two weeks after production of the first narrative, and the third narrative was to be produced two weeks after production of the second narrative. Tr. 112,744. No estimate was provided, however, for the production date of Dr. Kaysen's (IBM's fourth economic expert witness) narrative statement.

Finally, on June 5, 1980, in response to the court's urgings, counsel for IBM agreed "to strain every effort" to produce the first narrative no later than June 30th, tr. 112,763. In a letter to the court on the following day, counsel stated that he was "confident" that "at least a very substantial part" of the first narrative would be ready by June 30, 1980. Letter of Thomas D. Barr, dated June 6, 1980 to Judge Edelstein.

What actually occurred on the eagerly awaited June 30, 1980 target date? IBM submitted a written statement authored by Dr. Mancke, its first economic expert witness, which was characterized as the first of three installments of a "historical statement based upon the record," to be used by IBM's expert witnesses. In his letter of June 30, 1980 transmitting the statement to plaintiff, IBM counsel stated that he hoped the "analysis section" of Dr. Mancke's narrative would be available within the next three weeks. Letter of Thomas D. Barr, dated June 30, 1980 to Robert J. Staal.

Defendant's submission of June 30, 1980 was the first indication that the narrative statements of IBM's economic experts would consist of two general parts a historical statement and an analysis section. It cannot be emphasized too strongly, that until June 30th the court had every reason to believe that submission of the long awaited first narrative statement, or a very substantial part of it, would necessarily include the guts of any expert's testimony that is, analysis and opinion. Indeed, in no prior instance did IBM submit a narrative statement on the installment plan.

While the court believes its patience is great, it is not infinite. During the conference of July 9, 1980 the court ordered defendant to choose one of three procedures for presenting the direct testimony of its four economic expert witnesses. Briefly described, the first procedure called for submission of narrative statements on dates certain and on the express condition that failure to meet a production deadline would result in the witness being stricken from the witness list, except for a clear and convincing showing of good cause why the deadline was not met; the second procedure would permit IBM to abrogate the February 1, 1980 stipulation, supra, and require it to present live direct testimony of the four experts as soon as possible; and the third procedure was a combination of the above two: IBM could call some of their experts for live testimony while presenting others by narrative statements to be produced on dates certain and on the condition stated supra.

IBM has opted for the first procedure. In a letter to the court dated July 10, 1980 counsel for IBM set forth a schedule for production of narratives which substantially complies with the schedule the court outlined during the July 9, 1980 robing room conference. Further, counsel states that "(w)e understand that should we not meet the above dates, the Court, unless a showing of good cause is made, may preclude the testimony of the witness." Letter of Thomas D. Barr, dated July 10, 1980, to Judge Edelstein.
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The court accepts IBM's schedule. Accordingly,

IT IS HEREBY ORDERED:

1. The following written statements prepared by defendant's economic expert witnesses shall be submitted on or before the following dates:

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A. 1960's Historical Statement (to be prepared by Franklin M. ...

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